In 1999, over four hundred million wooden pallets were produced for use in shipping freight.
While wooden pallets are relatively inexpensive to produce, they are also relatively heavy and bulky. As a result, where freight is being shipped in only one direction (e.g., from a manufacturer to a distributor), the wooden pallets are generally discarded after use, since it is uneconomical to return the empty pallets to their origin. However, disposal can present a problem, since many landfill areas are now refusing to accept discarded pallets because they are not compactable. Consequently, many discarded wooden pallets must be converted to mulch, which can present additional costs.
Furthermore, even where it is practical to reuse the wooden pallets, the wooden pallets themselves can present problems. By way of example, the wooden pallets are typically fastened together using metal hardware such as nails, screws, and bolts with nuts. This metal hardware can rust over time and may work its way into the product which is being carried by the pallet, thereby contaminating the shipment. In this respect it should be noted that approximately sixty percent of pallet usage occurs in the food and pharmaceutical industries, where such contamination can present serious health risks.